A new federal lawsuit builds on a major investigation into how the betting company used customer data. Here’s what’s alleged, what DraftKings says, and what to watch for.
Most people think of a “free bet” or a deposit bonus as a perk. A new lawsuit claims some of those offers were something else entirely: the product of an AI model built to predict which customers would keep playing and keep losing.
A Proposed Class Action
On September 30, 2026, a West Virginia man filed a proposed class action against DraftKings in federal court in Massachusetts, where the company is based. The suit alleges that DraftKings used artificial intelligence to identify gamblers who tend to lose, then sent those customers promotions designed to keep them betting.
The plaintiff says he gambled thousands of dollars with DraftKings over several years and received at least 70 promotional emails, texts and notifications in a single month, some arriving after he had gone just a few days without placing a bet.
The complaint argues this conduct was unfair and deceptive because it contradicts the company’s own privacy promises. According to the suit, DraftKings tells customers it may use their personal data to assess whether they are playing responsibly and to connect them with resources if it spots signs of a problem. The plaintiff claims the company instead used that same data to pick out vulnerable customers as promotional targets. The suit also claims DraftKings violated Massachusetts law by not telling customers it was using AI this way.
According to the complaint, the company sorted users into two groups: “inelastic” customers, who were less likely to lose, and “elastic” customers, who were most likely to lose money. Those labeled “elastic,” it claims, were flooded with offers meant to keep them gambling and keep them from leaving the platform.
The plaintiff is seeking to represent a nationwide class of people who were labeled “elastic” and received targeted promotions by email, text or in the app. The suit brings claims for breach of contract and money had and received, and asks for damages, refunds, the return of profits, and a court order changing the company’s practices.
The case is Daniel Vest v. DraftKings Inc., No. 1:26-cv-14462, in the U.S. District Court for the District of Massachusetts. These are allegations only. No court has ruled on them, and the class has not been certified.
Where The Claims Come From
The lawsuit relies heavily on a New York Times investigation published September 19, 2026. Based on interviews with more than 40 former employees and a review of internal documents, the Times reported that DraftKings built a model in 2023 for its online casino business that scored players on how much they were likely to lose after receiving a promotion. The higher the score, the more valuable that customer appeared as a target for free bets, deposit matches and profit boosts. One former data analyst told the Times that, following that logic, “the best investment would be a problem gambler.”
The Times also reported that a separate effort inside the company to build a tool identifying customers at risk of gambling addiction was set aside before it was put to use.
What DraftKings Says
DraftKings publicly denies the allegations. The company has said it does not use AI to target customers based on their losses or on signs of potential problem gambling, and that it intends to defend itself in court. It also rejected the Times’ characterization of its marketing when the investigation was published.
Regulators Are Watching
Following the Times investigation, the Massachusetts Gaming Commission said it would look into how DraftKings and other licensed sportsbooks use artificial intelligence. Massachusetts law requires betting companies to disclose how they use AI and prohibits using it to make a platform more addictive. The commission has not made any findings of wrongdoing.
Why This Matters In Texas
Although online sports betting and online casino gambling are not generally legal in Texas, many Texans still use betting and fantasy apps, whether through products available here, like fantasy and pick’em contests, or while living in or traveling to states where sports betting is legal. The questions raised by this case, about how companies use personal data and whether they keep the promises in their own privacy policies, reach well beyond one company or one state.
What To Watch For
If you or someone you love uses betting or fantasy apps, a few things are worth paying attention to:
- Offers that spike after a big loss or after you try to step away
- Promotions that keep arriving after you’ve set limits or asked to stop
- Difficulty turning off emails, texts or push notifications
- Keep records. Screenshots of offers, emails and account history can help you understand your own pattern.
Many major platforms offer deposit limits, time limits and self-exclusion. If gambling has stopped feeling like entertainment, help is available 24/7 through the National Problem Gambling Helpline at 1-800-GAMBLER.
Hilliard Law Is Paying Attention
Our team is closely following this case and the reporting behind it. We believe people deserve to know how companies are using their personal data, especially when that data may be used against their best interests. We’ll share updates as the case develops.
If you have questions, our team is here to listen.
This post is for general informational purposes only and is not legal advice. Hilliard Law is not counsel in the case described above. Reading this post does not create an attorney-client relationship.